OPEC to cut oil production: ASX to open higher

Market Reports

by David Chau

The Australian stock market will open higher this morning, thanks to a strong lead from Wall Street.

US shares rose after oil prices surged more almost 6% overnight. The US market reacted positively to news that a preliminary deal was in fact reached at yesterday’s OPEC meeting at Algeria.  This would be the first cut in production for in 8 years.  OPEC members will meet again in November, where it’s expected they will fine tune this deal.

US economic news

There have been positive signs for business investment, according to the latest Commerce Department data.  Orders for core capital goods (such as motor vehicles and appliances) rose for the third straight month. In August, capital goods orders increased by 0.6%, which beat economists’ expectations of a 0.2% drop.

Markets

Wall Street finished higher, with the Dow Jones gaining 0.6 per cent to close at 18,339. The S&P 500 was up 0.5 per cent to close at 2,171 and the NASDAQ added 0.2 per cent to close at 5,319.

European markets were also higher: London’s FTSE gained 0.6 per cent, Paris added 0.8 per cent and Frankfurt was up 0.7 per cent.

Asian markets closed mixed: the Nikkei lost 1.3 per cent, the Hang Seng added 0.2 per cent, and the Shanghai Composite was down 0.3 per cent.

The Australian share market finished flat yesterday: The S&P/ASX 200 Index was up 6 points to close at 5,412. This morning, on the futures market, the SPI is up 41 points.

Currencies

The Australian Dollar at 7:30AM was buying $US76.89 cents, 59.07 Pence, 77.45 Yen and 68.55 Euro cents.

Company news

Singapore-based, 8I Holdings (ASX:8IH), has sold 78.6% of its 49.9% stake in Velocity Holdings Pty Ltd for S$3.1 million. The company says it will use the sale proceeds to seek other investment opportunities. Shares in 8I closed 1.33% higher at 76 cents.

The Federal Court of Australia has made orders approving the scheme of arrangement for Teranga Gold Corporation to acquire all the ordinary shares in Gryphon Minerals Ltd (ASX:GRY) that it does not already own. These orders will be lodged with ASIC today, and Gryphon will apply for its shares to be suspended from trading at the ASX by close of business today. Shares in Gryphon closed steady at 22 cents.

Commodities

Gold has lost $5.50 cents to $US1,325 an ounce.
Silver has gained $0.09 to $19.25.
Copper is up 3 cents to $2.20 a pound.
Oil is up $2.49 to $US47.16 a barrel.

Ex-dividends